WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC)
announced today that it filed an enforcement action in the U.S.
District Court for the Northern District of Illinois in Chicago, alleging that Todd
J. Delay, a futures broker located in Columbus, Ohio, engaged in a scheme to
manipulate the price of the October 2003 Feeder Cattle futures contract traded at the
Chicago Mercantile Exchange (CME).

The futures contracts at issue involve “feeder cattle” as defined in the
CME contract, which are young steers that are sent to feedlots for finishing into
“fed” or “fat” cattle that, in turn, are sent to packers for
slaughter. Futures contracts enable cattle producers, meat packers, bulk beef
purchasers and others to manage their price risk more effectively, and foster price
discovery in the livestock industry.

The CFTC action charges that Delay caused Feeder Cattle futures contracts to trade at
an artificially high price at the end of October 2003 by conspiring with two Nebraska
feedlot managers, Jack McCaffery of North Platte and John D. Lawless of
Imperial, to report phony sales of feeder cattle to the U.S. Department of Agriculture
(USDA). According to the complaint, the USDA included these sales in its public cash
market feeder cattle report, which the CME used to price the CME’s Feeder Cattle
Index, which ultimately determined the final settlement price for the October 2003
Feeder Cattle futures contract.

According to the complaint, the reports of phony sales caused an increase of $2.85 in
the final settlement price of the CME’s October 2003 feeder cattle contract, to
$106.98 per hundredweight of feeder steers. The CFTC lawsuit also alleges that, as
part of the manipulation scheme, Delay violated CFTC-approved speculative position
limits for the Feeder Cattle futures contract, in that Delay and other trading
accounts he controlled bought twice as many contracts as permitted, all of which
benefited from the rise in futures prices.

The Commission would like to thank the CME’s Market Regulation Department for
its invaluable assistance throughout the investigation.

The CFTC encourages members of the public to bring to our attention any suspicious
activities involving futures or commodity options, including matters involving foreign
currency (forex) investments or suspicious Internet websites.

In addition, the CFTC publishes a series ofConsumer Advisoriesat
http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to
warning signs of possible fraudulent activity and offering precautions individuals
should take before committing funds.